OpeOluwani Akintayo
10 March 2018, Sweetcrude, Lagos — Royal Dutch Shell Plc has said its focus is on increasing its U.S. shale operation’s oil production and has earmarked about 85 percent of its budget to the cause for the next two years.
Shell’s head of shale operations, Greg Guidry, disclosed this to Reuters on the sidelines of the CERAWeek energy conference in Houston.
According to Guidry, such large budget was necessary as the company aims to boost its overall shale production by 200,000 barrels of oil equivalent per day (boe/d) to 500,000 boe/d between 2017 and 2020, mostly in the United States with some production in Argentina.
The budget will particularly be for the Permian oilfield of West Texas and Canada’s Duvernay Basin, he said.
Shell joins the likes of Exxon Mobil Corp and Chevron Corp with such ambition, aiming to make shale production a driver of growth in the next decade.
“We’re not spending very much at all on the dry gas assets,” Guidry added. “Liquids is growing very rapidly because that is where our capital is going.”
Shale oil wells today can be profitable with oil prices above $40 a barrel and gas above $2 per million British thermal units, Guidry said.
Shell has earmarked between $2 billion and $3 billion per year, roughly 10 percent of its capital expenditure, for shale until 2020.
Shell’s 2016 acquisition of BG Group in 2016 boosted the share of natural gas to 50 percent of its global fossil fuels output and made it the world’s largest natural gas trader.
